What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries. Click on the number to jump straight down to the question.
1. Handling a large gift
2. Free toothbrushes
3. Internet banking and future loans
4. Pieces of inspiration
5. Medical billing problems
6. Getting value from panini press
7. Toilet paper: quality or price?
8. How much should I save?
9. Memorable but inexpensive Father’s Day
10. Starting over with credit cards
A few weeks ago, I spent most of a Saturday to quite a few yard sales in our local area. I took my oldest child with me.
On those visits, I didn’t buy anything and I really wasn’t planning to. So why did I go? I was looking for huge bargains on stuff I knew about (“My son went to college and left behind this old junk…”). I also wanted to show my son a clear example of personal restraint, as I pointed out things at each sale that we could have purchased but chose not to.
Q1: Handling a large gift
I graduated from college last June, and have been looking for a job (in the architecture field, which has been challenging). For graduation, my dad gave my wife and I a very generous gift of $20,000. We haven’t been completely sure what to do with it, and right now it’s sitting in a savings account. We are basically looking at three options. First, we could just keep it in savings with as high interest as possible, and just let it grow. Two, we could use it to pay off a large portion of our student loans, which total about $27,000. Or three, use it to start a small business. Any advice in deciding which route to take?
There isn’t a right answer for what to do with the money. It depends entirely on what goals you guys have.
If I were you, I’d spend some time talking about where you want your lives to be in, say, ten years. What do you want from your life? Do you want to buy a house? If so, when? Next year? Nine years from now? Do you want to have children? When? Do you have a really good and well-researched idea for a small business?
The farther off your goals are, the more I’d lean toward paying off the student loans. The closer they are, the more I’d lean toward the savings account. I’d only open the business if you have a well-researched business plan and a strong desire to run that business.
Q2: Free toothbrushes
Whenever I go to the dentist every six months, they give out a free toothbrush. However, my toothbrushes start to get pretty ragged at about the three month mark. Is it cheap to ask for two toothbrushes when visiting the dentist?
I don’t think there’s anything wrong with asking for another toothbrush at the dentist’s office.
If the dentist has a very strict policy of one toothbrush per customer, then they’ll simply say no, which puts you right back where you started, anyway.
I personally don’t wear a toothbrush that hard, so I wouldn’t have the need to ask for multiple brushes.
Q3: Internet banking and future loans
My question has to do with internet banking and obtaining loans in the future. Due to a divorce and subsequent bankruptcy, I now have a checking and savings account with internet-only banks, as I was unable to open accounts with most of the brick-and-mortar banks in my city. I have two checking accounts with Perkstreet, one for actual checking and one for short-term savings. My emergency fund is saved with Ally. Perkstreet only offers checking accounts at this time, which is totally fine by me. My question is: bankruptcy notwithstanding, will it be more difficult to refinance my auto loan or ever get a home loan with another bank because I do not have a standing relationship with anyone? While I know anything beyond checking and savings is far in the future, I’d like to put the right steps in motion.
I’m unclear why you were unable to open an account with the banks in your city. Whatever the reason was that they denied you an account there, I would resolve it.
If you know what that reason is and have resolved it, the next step I would take is making sure that your credit report is good. Start with the FTC’s website at annualcreditreport.com and verify that everything on your report is correct and that you don’t have many late payments on there (or, even worse, failure to pay).
If you’ve taken those steps, you should be in pretty good shape for a loan. People often get loans from banks where they don’t have active accounts.
I have a huge collection of quotes that I’ve picked up over the years. I dig through them pretty regularly for various things (usually presentations, since my presentations usually just feature a picture with a quote vaguely related to what I’m talking about).
I find pictures because I often look at them in bunches with my children. I try stick to ones that I can share without violating copyright.
As for the videos, I watch most of the Ted talks (and share many of those) and I also often use YouTube for music.
Q5: Medical billing problems
My husband is having a hip replacement soon. We’ve researched the hip implant however hospital costs are not available. We’ve contacted the hospital billing department who referred us to the surgery department who referred us to purchasing who referred us back to billing. The billing person couldn’t give any information on account of HIPPA and when we challenged that (because no patient name) we were referred to purchasing. Do you see the dilema?
Any time I’ve been in the hospital the bills are in the mailbox before I got home so SOMEBODY knows what the hospital charges; we’d just like to know what to expect. Do you have any suggestions?
In this situation, I’d go up the administrative food chain a bit. Who is in charge of these departments? I would try to contact those people directly.
It’s often difficult for the first-level customer service people to answer the questions you’re asking here. Often, they don’t have access to the data you want.
I would keep escalating until I could get answers.
Q6: Getting value from panini press
My children got me a panini press for Mother’s Day. While I love the thought and I’ve used it a couple of times to make sandwiches for me and for family members, I don’t really know what to do with it. Why wouldn’t I just cook a sandwich in a skillet with a bit of weight on top of it? I don’t want to just put the item away and not use it and eventually yard sale it because I know my oldest son spent some of his carefully-earned allowance money on it.
If you look at it as just a sandwich machine, it is indeed pretty limited. You can replicate what it does by simply cooking a sandwich in a skillet with a small weight on top (we use another skillet).
However, you should look at a panini press as essentially being a small cooker. You can cook chicken breasts on it or hamburgers on it or portabella mushroom caps on it quite easily. Slice some potatoes or sweet potatoes, dip them in a bit of vegetable oil, and cook them on the panini press.
If your press has a griddle-like surface, you can also cook things like eggs and waffles and pancakes on it.
A panini press has more uses than just sandwiches and it’s worthwhile to experiment. However, don’t use this as a reason to run out and buy one, as you can still replicate many of these uses with the kitchen equipment you already have.
Q7: Toilet paper: quality or price?
I’ve been a long time reader (3+ years) and have a question about toilet paper. I have a reputation in my family for being frugal. I’ve always bought the cheap single ply toilet paper. My family teases me about this choice and have bought me charmin’s ultra soft double ply as a gift for birthdays and holidays as a joke. I am not arguing the quality difference, you get what you pay for. One feels like a soft towel, the other is closer to sandpaper. I just find it hard to throw money down the toilet on your bum. The other argument I have a against buying the nicer stuff is based on my personal habit of always double or triple folding the toilet paper regardless of its thickness. I’m not sure how many people do this, but if I double or triple the thick stuff, as I’ve found myself doing at my families, I feel like I’d go through a roll really quickly. Is there any way to quantify the amount a person might save if he buys the cheap stuff vs the more expensive. I know it depends on a number of personal variables….but if it was only saving me $10 a year I might be convinced to upgrade.
If you triple-fold the sheets, it’s pretty easy to quantify how much you save on toilet paper.
If you buy a jumbo-pack of Charmin like this one, you’re going to be spending about $0.75 per roll. Each roll has 176 sheets on it, which means if you’re using three sheets at a time, you’re going to get 58 uses out of a roll. Each use, then, is going to cost you 1.3 cents.
On the other hand, Scott rolls can be found for $1.16 per 1,000 sheet roll, meaning you’re going to have a cost of 0.35 cents per triple-sheet use. Your generic of choice may be even cheaper.
Now, is that extra penny per use worth it for the comfort? It’s really up to you.
Q8: How much should I save?
I’m a 35 year old professional with a good job now, however I spent quite a few of my adult years quite poor (beans and rice and no fresh food poor). Since graduating with my JD, I’ve managed to save approximately one year of my salary in my retirement accounts, and 15% of one year’s salary (pre-tax) in an emergency fund. I own a home that I don’t live in because I had to move for work. I have tenants who cover basic monthly costs (mortgage, taxes, etc.) however I’ve had to put a significant amount of money into the property because we were hit by a tornado last year and my insurance company simply didn’t cover everything (plus I had some repairs dating back to when I couldn’t afford anything). I’m currently negotiating with my insurance company over the last major repair (approximately $25k). At this point I’m operating under the assumption that they’ll eventually cover most/all of it. I can’t sell the house at this point without a major loss, because my neighborhood was so hard hit by the foreclosure crisis. So I’m resigned to being a landlord for now. Who knows maybe someday I’ll move back there. Right now I’m in a rental about 90 miles away (not commutable due to traffic and a relationship). I have a paid off car, so that shouldn’t be an issue in the short term. My only non-mortgage debt is approximately $25k in student loans, plus an additional similar amount to my dad for school and house expenses. My dad doesn’t need/want to be paid back quickly, so we’ve agreed that I’m to consistently give them $50/month. (Note: My parents are retired and now working in new PT careers. They haven’t touched their retirement funds yet and don’t expect to for quite some time.)
Anyways, in about four years I’ve been able to save approximately one year of my salary in retirement accounts (and another 15% in an emergency fund), by living in a way that simply isn’t comfortable. I was willing to do that temporarily because I was so far behind, and because I never want to be as poor as I used to be again. Right now I’m saving approximately 28% of my salary (pre-tax). I now need to figure out the “middle ground” route. I need more money for my daily/monthly expenses, but I’m so afraid to save less for retirement, and am having trouble determining whether I’m now “caught up.”
Any thoughts or resources would be helpful.
It is really all about comfort level. As long as you’re spending less than you earn and saving the difference, you’re in good shape.
If I were you, I’d target saving 10% of my income each year for retirement and another 15% for other expenses (like eventual car replacement, maintaining the emergency fund, and so on). I’d spend the rest on bills and just living life.
Some people strongly desire debt freedom and are willing to live very lean to get there as quickly as possible, but that’s not a solution for everyone.
Q9: Memorable but inexpensive Father’s Day
Over the last year or two, I’ve come to really realize how awesome my dad is. He’s just been a rock in my life, my sister’s life, and my mom’s life for as far back as I can remember. Whenever something crazy would happen to one of us, Dad would just listen and he’d take care of things. I was so dumb for getting so angry with him when I was younger because he’d stop me from doing something even dumber.
Anyway, I’m trying to think of something to give him on Father’s Day to really show my appreciation, but I don’t have much money. I am delivering pizzas while trying to get a good job and there just isn’t a lot of cash. I need your help!
Time. Spend time with him.
Plan a day where the two of you do whatever he enjoys doing. Does he like to fish? Does he like to play board games? Does he like to do yard work? Golf?
Whatever it is he likes, just do it with him for the whole day, even if you find it to be the most boring thing on earth. Don’t grumble about it a bit – this is his day, so do what he wants and put your best effort into enjoying it with him. Pack up a picnic lunch and eat it with him. If you’re not good at some aspect of what it is he enjoys doing, ask him to teach you.
Trust me, it’s just about the best Father’s Day gift you could give him.
Q10: Starting over with credit cards
So I’ve been meaning to get a credit card that benefits me. I have only one credit card that I’ve had for 10 years. Through bad experience (getting into debt over my head), I’ve closed off all of my cards 6 years ago and kept just one, Capital One. My credit score dropped but I have worked on it and it’s up to 740 or so. I don’t have any debt except a house mortgage. I pay off my balance monthly so as to not accrue any interest. It also has an annual fee of $49. I’d like to get a credit card that earns points or pays me back for using it. I want to close my CapOne card because of the annual fee but know that if I do so, my credit score might drop. I don’t want to keep it around and charge a small amount on it to keep it going either. What do you suggest?
If I were in your shoes, I would open a card with whatever business I used the most. Do you use a particular gas station a lot? I’d get a card from them. Do you shop mostly at a particular store? Get a card from that store.
Almost always, those store-branded cards have really good bonus programs when you shop at that store. You can use them elsewhere, but the bonuses will be pretty small (or none at all).
Once you have the card for a year or two, cancel the old one. If you cancel the old one now, your credit history will take a pretty painful shot. If you have another line of credit that isn’t brand new, the drop from canceling the old card will be smaller – and it gets even smaller the longer you have the new line of credit.
Got any questions? Email them to me or leave them in the comments and I’ll attempt to answer them in a future mailbag (which, by way of full disclosure, may also get re-posted on other websites that pick up my blog). However, I do receive hundreds of questions per week, so I may not necessarily be able to answer yours.